ecision on accepting additional business EX 25-15 D Brightstone Tire a presently produces nd Rubber Company has capacity to produce 170,000 tires. OBJ.1 Brightstone o tires for the North American market at a price of 32,05 r tire. Brighuso is offering to buy 20,000 tires for $116 per tire. Brightstone's and sells 130,000 tire. Brightstone is evaluatin f a. Differentia revenue, $2,320,000 a special order from a European automobile com- pany, Euro Motors. Euro is offerin stem indicates that the total cost per tire is as follows Direct materials Direct labor Factory overhead (60% variable) Excel 56 Show 25 26 129 How Selling and administrative expenses (45% variable) Total pays a selling commission equal to 5% of the selling price on North Ameri- which is included in the variable portion of the selling and administrative Brightstone can orders, expenses. However, this special order would not have a sales commission. If the order per tire. In addition, Euro has made the order conditional on receiving European safety a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) b. was accept ed, the tires would be shipped overseas for an additional shipping cost of $7.50 certification. Brightstone estimates that this certification would cost $165,000. or accept (Alternative 2) the special order from Euro Motors. What is the minimum price per unit that would be financially acceptable to Brightstone? lerico for a service company r a zero in cells you would otherwise leave blank Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) January 21 Differential Effect Reject Order (Alternative 1) Accept Order (Alternative 2) on Income (Alternative 2) Revenues Costs Direct materials Direct labor Variable factory overhead Variable selling and admin expenses Shipping costs Certification costs income (loss) Brightstone accept the special order from Euro Motors. b. Total Differential Costs Number of Units Minimum Price per Unit Alternative calculation: Differential Income from Selling Price OfferedAccepting Special Order by Euro Motors Number of Units 13 42 43 45 46 Ex. 25-15 Ready O Type here to search